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In our previous text, we covered the basic solved problems based on productivity measurement highlighting the importance of single-factor productivity and multi-factor productivity. As we progress in the text, we will discover how important it is to measure process productivity and how it is proportional to the efficiency of the company. Here we start with some simple and then advance level solved problems that will clear your fundamentals regarding this one of the most touched topics in operations management.

Productivity Measurement Assignment

In a common language, Production is the creation of goods and services. Here we talk about the role of productivity measurement in operations management.  Productivity Measurement (P. M) = Output / Input .Productivity can be measured in a  variety of ways, such as labor, capital, energy, material usage, and so on. Let us start with a very basic example so as to give an idea for the usage of productivity measurement formula. We are starting with single-factor productivity.

# 1 Single-factor productivity example

If a company produces 1000 units of boxes with total labor hours of 250 . What is the productivity of the company?

# 1 Solution

Productivity Measurement (P. M) = Output / Input

Here output = 1000 units

Input = 250

Putting the values in above-given Formula,  P. M = Output / Input

P.M = 1000/ 250 = 4 units per labour hour

# 2 Solved Problem

Riverside Metak Works produces cast bronze valves on a 10 person assembly line. On a recent day, 160 valves were produced during an 8-hour shift.

a) Calculate the labor productivity of the line.

b)  The manager at Riverside changed the layout and was able to increase production to 180 units per 8 -hour shift. What is the new labor productivity per labor hour

c )  What is the percentage of productivity increase?

# 2 Solution 

P. M = Output / Input ………………………………………………………………………………………………………….eq 1

a) In case one ,   Output = 160 valves

Input = Total labour hours = Number of people * labor hour by one person = 10* 8 = 80 labor hours

Using the values in eq 1 = P.M =  160 valves/ 80 labor hours   = 2 valves per hour

Therefore, Labor productivity of the line is 2 valves per hour

b ) In the second case, Output is changed and we have new output as 180 units

But the number of shift hours and the total number of people working on the assembly line remains the same. It means there is no change in the input. As the output has increased but the manager didn’t add any labor hour or person, it is quite obvious that productivity has increased as the people in the assembly line are working faster now.

Output = 180 valves

Input= Total labour hours = 80 labor hours

New Labor productivity = Output / Input = 180/ 80 = 2.25 valves per hour

Hence, Productivity Measurement in this case is 2.25 valves per hour .

c) Productivity  Increase =  New Productivty – Old Prodcutvity

Hence , 2.25 – 2 = .25  is the change in prodcutivity

Percentage of increase in productivity = ( change in prodcutivity / original prodcutivity ) *100

and this is equal to ( .25/ 2 ) * 100 = 12.5 %

Hence, The answer is 12.5 %

Some important links for Productivity Measurement :

DOWNLOAD PPT FOR PRODUCTIVITY MEASUREMENT

 SOLVED PROBLEMS ON PRODUCTIVITY MEASUREMENT

Book Referred, in this case, is Operations Management by Jay Heizer and Barry Render. If you would like to have link for free download, let us know we will upload the Operation Management book for free in our next post. These are the two basic examples showing the changes in multifactor productivity when we make changes in labor and other factors with the introduction of new systems. If you have any queries regarding Operations Management, Productivity Measurement, Solved Problems kindly write to us in the below comment. Also, if you liked this post kindly share it with your friends.